Q. Should she pay the entire January bill in December if we think there is enough time to claim reimbursement from the 529?
A. Expenses for an academic term that starts in the first 3 months of 2026, but are paid for in 2025 count for educational tax benefits on your 2025 tax return. So, yes, a 529 distribution, in 2025, would be valid.
But, again, in most off campus situations, the COA is going to govern.
Any expenses paid in January 2026 cannot be counted towards a 529 distribution taken in 2025. Any expenses incurred in 2025, but not paid for until 2026, cannot be counted toward either a 2025 or 2026 529 distribution.
